Last week, Asian stocks posted their sixth weekly gain, the longest winning streak since 2010 amid a dovish Federal Reserve and optimism that Greece would successfully negotiate a deal with the private creditors.

STI has surged 10.2% or 270 points year to date (STI closed at 2,646 on 30 Dec). On the charts, it is likely that STI may go higher early this week and challenge the gap 2,943 – 2,974 (formed on 5-8 Aug 2011) due to two possible factors viz.

a) Greek debt talks crystallised and an agreement is formed; or / and

b) China eases its monetary policy by lowering its required reserve ratio or enacts other measures.

However, once the initial euphoria over the above measures cools off, we may have to contend with what the credit rating agencies have to say on the Greek debt talks and whether this constitutes a default. Secondly, there …